In Planadvisor, David Kirchner Discusses the State of Pooled Employer Plans

Pooled employer plans (PEPs) allow multiple employers to join a single defined contribution retirement plan, ideally resulting in lower costs, fewer administrative tasks and reduced fiduciary burdens for the employers—which is important given the unrelenting wave of 401(k) and 403(b) litigation. Since they were first allowed in 2021, PEPs have seen traction in the small business market.

In a Planadvisor article, Benefits Consulting Group principal David Kirchner said it has become clear that PEPs are not a one-size-fits-all proposition, and market differentiations are starting to occur. For example, David notes some PEPs focus on setting up a first retirement plan for employers who have never offered one, while others require minimums of 100 to 200 participants.

“PEPs that do well are generally are those that understand their roles and responsibilities, have agreements with the participating employers that clearly outline those roles, have a strong onboarding process for employers and give those clients information about their process for vetting the various players they are hiring, like recordkeepers,” said David.